Homework Question on Entrepreneurship
- Kindly write a literature review on only two of the below topics of your choice:
- Market Risks (in entrepreneurship and start-up businesses)
- Competitive Risks (in entrepreneurship and start-up businesses)
- Technology & Operational Risks (in entrepreneurship and start-up businesses)
- Financial Risks (in entrepreneurship and start-up businesses)
Homework Answer on Entrepreneurship
These are risks that are brought forth by the strategies and positions of the other players in the market, which is challenging for the customers (Talwar, 1993). These risks involve the operations of the company in relation to the other rival companies (Talwar, 1993). Any entrepreneur who is opening a business must put in mind that the rivals will try to copy his/her business model and this is a great risk that can lead to loss of revenues in future and lead to the shutdown of the business (Ghoshal, 1987).
The rivals will start price wars with the entrepreneur, whose aim is straining him/her until he succumbs to the pressure and quit the market (Rothaermel, 2013). The price wars can be in form of reducing their prices to levels, which the entrepreneur will run to great losses if he reduces to that level. This will in turn steal the customers since they prefer where they get low prices. The rivals will try to outspend the entrepreneur in marketing strategies like advertisement (McGrath, 2013).
This is always to draw the customers to their business. The business should come up with ways to counter this because failure to can make the other company to gain dominance over it.The rivals can even start bad rumors about the product that the business is producing. This is a great risk since it will create a negative perception on the minds of the customers and this can lead to reduction in revenues due to loss of the customers (Ghoshal, 1987).